(Yicai Global) Aug. 17 -- New Zealand's parliament passed an act with 63 votes in favor and 57 against on Aug. 15 which will strictly restrict foreigners without right of residence from buying local real estate.

It thus honored a pledge Prime Minister Jacinda Ardern made during her campaign in September.

After passage of the law, David Parker, the associate finance minister said it marks a major milestone that reflects government resolve to afford more New Zealanders the chance to realize their dream of home ownership. However, the National Party, which is in opposition to the new administration, deems the law an absurdity that targets buyers with Chinese-sounding names.

This act will only take limited effect on New Zealand's real estate market, for overseas buyers only make up 3 percent of all purchasers, said Luo Xuexing, chief executive of overseas real estate agency Juwai. Most Chinese buy houses in the country for self-use, and many have already obtained New Zealand citizenship.

This legislation should not be seen as an anti-Chinese law, because though Chinese buyers top the ranks of overseas investors in New Zealand in number, the actual volume of their transactions is not necessarily in proportion to their numbers, advised William Wan, an immigration lawyer with New Zealand-based PJ International. Most of those lavishing huge sums are the wealthy from the UK or the US, he added.

Chinese investors' first choice of overseas real estate is still the US or Canada, followed by Australia and the UK, and finally Japan and Thailand, Shi Jinqiang, the general manager of the overseas business department of Chain Home Network (Beijing) Technology, also told Yicai Global. New Zealand's curbs will not negatively impact his company's overseas business, whose on-sale real estate properties in the South Pacific country are mainly oriented to locally-resident Chinese in any case.

With a population of over four million, New Zealand's gross domestic product is around USD182 billion, equal to that of the Chinese cities of Chengdu or Wuhan, and it has always been an object of property investment by the affluent. Home prices in the country's largest city of Auckland have almost doubled over the last decade driven by a mass influx of foreign funds, and the average rise of housing prices nationwide has also topped 60 percent. As a result, home ownership by nationals has fallen to a new low since 1951, which has aroused widespread discontent.

Most overseas buyers are from China, with its neighbor Australia as the second source, data from New Zealand statistics agency shows. Due to the special ties between the Antipodean neighbors, Australian investors are exempt from this new act, however.

Though foreign investors without right of residence are barred from buying second-hand homes in New Zealand, they can still buy new apartments if the proportion of non-resident foreign owners does not exceed 60 percent of an entire apartment building.